What will happen if the fund keeps falling and I keep adding positions?

If the fund keeps falling and you keep adding positions, it means that you are a contrarian, which is very rare and valuable. In many cases, this is to risk death and go against the trend, getting twice the result with half the effort. The general trend of the world is vast and powerful. Those who follow it will prosper, and those who go against it will perish. What about stocks?

There are generally two ways to increase positions against the trend:

One is called fixed investment

For example, buy 1,000 yuan when it is 10 yuan, and buy 1,000 yuan when it is 9 yuan. Buy 1,000 yuan... and the fund keeps falling. When it falls to 1 yuan, buy 1,000 yuan and hit the bottom.

At this time, you spent 10,000 yuan and bought about 2,830 shares. The market value is 2,830 yuan. It will take about 3.5 times to recover the capital, which means it will fall 90% all the way. If the average price is fixed, it will cost 350. % increase can be achieved.

This is what is called when it falls, it is easy to rise, but when it rises, it is difficult.

A so-called doubling of fixed investment

For example, 10 yuan buys 1,000 yuan, 9 yuan buys 2,000 yuan,..., the fund keeps falling, and when it falls to 1 yuan , buy 10,000 yuan, bottom out.

At this time, you spent 55,000 yuan and bought about 22,218 copies. It would take an increase of about 250% to get back the money.

The cost is also huge.

According to the game theory method, in a downward trend, only overdoubling investment can truly spread the cost.

For example, if you buy 1,000 yuan for 10 yuan and 10,000 yuan for 9 yuan, the cost is 9.08 yuan. If you buy 100,000 yuan for 8 yuan, the cost is 8.10 yuan.... If it falls to 1 yuan , you have to double your investment by 1000000000000 yuan, which is about one trillion yuan.

In this way, the entire market belongs to you, and you have the final say on the price.

So we come to the conclusion that if the fund keeps falling and you keep adding positions, the result will be disastrous.

The correct approach is not to increase the position, and it is best to sell all the previous positions, wait for the opportunity, and re-enter at a low price.

For example, if you buy 1,000 yuan for 10 yuan, it drops to 8 yuan, you sell it, you get 800 yuan, and you lose 200 yuan. You keep waiting, and it drops to 1 yuan. You buy 800 yuan, 800 copies. , as long as it rises to 1.25 yuan, your capital will be back. In other words, if it rises by 25%, you will get your capital back.

Therefore, we should focus on entering the stock market at the early stage of a bull market or the late stage of a bear market, instead of constantly adding positions, we should liquidate them as soon as possible.

Cough cough cough! Classmates, in this class, Lao Yan is here to tell you what the consequences will be if you cover your position when it falls: Your position will be liquidated, and you won’t have the funds to cover your position later, and there are risks in copying the bottom, so be careful to copy it to the basement! Be cautious when buying lows and buy lows reasonably. (Local tycoons who are not short of money can do this.

If the market trend is good, then it may be better to keep buying at the bottom without a basement. But if you buy at the bottom and go to the basement, can you imagine the consequences? Take the period from 2.18 to 3.10 as an example.

1. If you keep buying at the bottom, it is very likely that your position will be liquidated. If the market goes down later, you will have no money to buy, and you will be buying at the bottom, and you will lose money. The money range is getting bigger and bigger, and it is impossible to control costs and reduce risks. Think about it if you keep buying the bottom during this period, you will lose at least 10%.

2. There are risks in buying the bottom, so you need to be cautious. Funds: First of all, it’s okay to buy on dips, but you still have to look at the trend. If the trend is no longer there, then you have to control the position and buy the bottom. For example, as I said before: add to the position the next day, or buy part of it if it drops by about 6%. , buy in batches and segments. Buy in time, buy in small amounts.

Calm down and wait for stabilization, otherwise it will be difficult to control the subsequent situation

3. If you keep buying at the bottom, you will have a greater chance of losing money and will not be able to cope with the subsequent falling market. If you keep buying at the bottom and continue to fall after your position is full, you will How to operate? Can you continue to cover your positions calmly? Therefore, you must always have an expectation when buying the bottom: if you buy part of the bottom today, it may continue to fall tomorrow, so I will buy less today and double the purchase tomorrow. This can also reduce the probability of liquidation, or directly invest and wait

4 , People with a small amount of funds should save bullets and pay attention to their positions. There is nothing wrong with the local tycoons buying the bottom. They just throw money. I have more money and can buy at any time. Don’t panic. But people with less money need to be more economical with bullets and place bullets in key locations. This is the best way to buy bargains. Non-rich people should look more at where the bullets hit and think more about it. Control positions and shoot bullets

5. Buying at the bottom also requires skills. When the position reaches 80%, you generally don’t buy at the bottom. Instead, you focus on fixed investment and slowly enter the position. Therefore, you must have a position that matches the expected position when buying the bottom. For example, I have an 80% position. At this position, I may continue to invest or lock up the position and wait for long-term holdings to reap the benefits

1. The position will be liquidated. For those with small funds, the operating space is zero

2 , The risk is high, you have a full position to buy the bottom, and when you encounter the basement, you can only pretend to be dead and cut the flesh

3. The probability of losing money in a short time is high, and you have no awareness of risk control

4. Buying the bottom is brainless, and you end up losing money. To buy orders, you need to slowly accumulate experience and buy the bottom at the right time

If you hold a good fund and keep adding positions if it keeps falling, the result should be making money.

Choosing a fund depends on the fund manager and past performance. A good fund can bring good returns to investors.

If you buy a fund and encounter a decline in the net value of the fund, you can cover the position, but it is best not to cover the position continuously. You can choose a relatively low position based on the trend of the stock market and the position of the fund. Cover the position when the price drops, and then cover the position again if it falls again.

If you don’t know much about the stock market, you can also cover your position according to the retracement range of the fund’s return rate. If the retracement range is large, you will cover your position. You can decide the retracement range yourself. If the retracement is less than the extent of the retracement, the position will not be covered.

The other option is to make fixed investments and cover positions according to time, a week, a month... You can choose the fixed investment time according to your own situation.

Of course, if you have enough funds, you can continue to cover your positions as long as they fall, and then hold them for a long time, and the results should be quite good.

I also have funds and stocks, and I plan to cover my positions based on the trend of the stock market.